​When it comes to commercial property insurance, coinsurance plays a crucial role in how expenses are shared between you, as the property owner, and your insurance company. Here's how coinsurance works in the context of commercial property insurance and how it can affect your business:

1. Deductible: Similar to other insurance types, your commercial property insurance policy will have a deductible. This is the initial amount you must pay before your insurance coverage kicks in.
2. Coinsurance Percentage: After you've met your deductible, coinsurance comes into play. It's expressed as a percentage, typically 80%, 90%, or 100% to value, and represents the portion of the covered property damage expenses you are contracted into paying premium for. Ex: your building is valued at $200,000 and you have agreed to 80% coinsurance, you need to be paying premium for $160,000. Making sure your building is valued correctly is crucial!
3. Covered Losses: Coinsurance applies to the losses or damages covered by your commercial property insurance policy. This can include damages caused by fires, storms, theft, vandalism, or other covered perils.
4. Out-of-Pocket Costs: Your out-of-pocket costs depend on the total amount of covered property damage expenses. If your coinsurance percentage is, for example, 20%, you will pay 20% of the costs, and your insurance company will cover the remaining 80%, up to the policy limit should there be a total loss.
5. Policy Limits: Your policy will have specific coverage limits. It's crucial to understand these limits because once the covered expenses exceed the policy limit, you may be responsible for additional costs incurring what is called a Coinsurance Penalty. 
6. Risk Management: Coinsurance is a factor to consider when managing the risks associated with your commercial property. You should assess the potential costs of property damage and ensure that your policy's coinsurance percentage aligns with your risk tolerance and budget. In plain English, you better make sure you have enough in savings to pay for the percentage and the deductible you have agreed to pay just in case there is a loss. 
7. Premiums: Commercial property insurance premiums are influenced by various factors, including the coinsurance percentage. Policies with higher coinsurance percentages (i.e. 80%) often have lower premiums, while lower coinsurance percentages (100%) may result in higher premiums. Balancing these factors is essential to find the right coverage for your business at an affordable cost.

​In summary, coinsurance in commercial property insurance determines how property damage expenses are shared between you and your insurer. Understanding your coinsurance percentage, policy limits, and how they affect your out-of-pocket costs is essential for making informed decisions about your commercial property insurance coverage, managing risks, and budgeting for potential property damage events.

by Josalyn Tippets

It feels like everything is increasing in price and the pinch is beginning to hurt. Many people have asked me why insurance premiums have shot up aggressively this year. Below you will find a short break down of why costs are on the rise:

1. Real Costs of Accidents and Disasters: When accidents happen or natural disasters strike, insurance companies step in to help you get back on your feet. But the reality is, these incidents often lead to costly repairs and medical bills. With technology becoming more advanced, fixing a car or home has become pricier, and insurers have to adjust their prices to ensure they can cover these expenses.
2. Mother Nature's Impact: Think about those hurricanes, wildfires, and floods that have been making headlines. They're not just stories – they lead to real damage and real claims. Insurance companies are there to assist you during these tough times, but the increasing frequency and severity of these events mean more payouts, and that's a significant factor behind rising premiums.
3. Keeping Up with Inflation: Just like how your grocery bill might be higher this year, the cost of repairing your car or home has also gone up. This is due to inflation, which affects everything around us. Insurance companies need to adapt to these rising costs, so they adjust their rates accordingly.
4. Tech Comes at a Price: Sure, those fancy car sensors and smart home devices are cool, but they can be expensive to fix when things go wrong. Insurers need to factor in the higher costs of repairing technologically advanced vehicles and homes, which can impact your insurance rates.
5. Everyday Distractions: Our lives have become busier, and that's led to more accidents caused by distractions like phones. Unfortunately, this has resulted in a higher number of claims for insurers to handle. When they pay out more claims, it often leads to adjustments in your premiums.
6. Standing Strong in Legal Battles: Legal changes and the rising cost of legal proceedings can also impact your insurance rates. If more people are filing lawsuits or if the legal landscape shifts, insurers might need to adjust their rates to make sure they can cover the potential expenses.
7. Facing Fraud and Challenges: Insurance companies also face challenges like fraud and complicated legal battles, which can increase their costs. To continue providing you with reliable coverage, they may need to increase rates to handle these unexpected hurdles.
8. A World of Influence: Sometimes, global events like supply chain disruptions or pandemics can indirectly affect your insurance costs. Just like your life is interconnected, so is the insurance industry, and global factors can play a role in rate adjustments.

In the end, rising insurance prices are a result of a mix of real-world factors that impact insurers' ability to provide the support you need. While it's frustrating to see those rates increase, remember that insurance is there to protect you through life's twists and turns and the cost of a loss is spread out across the masses instead of being your responsibility alone.

Life insurance is the most personal type of insurance you can have in today’s world.

But there seems to be a lot of confusion about it. Every consumer has different priorities and feelings. Add to that the fact that life insurance can be used for a variety of financial goals and needs, and you have a recipe for befuddlement.

When it comes to life insurance, most agree that if you have children, you should probably have it. There is no question. But what if you don’t have children? Do you need to purchase life insurance? Here’s why it may still be important, even if you don’t have kids now (or don’t plan to):

Many households need a dual income to survive.

Since women began entering the workforce en masse in 1960, household incomes have been on the rise. Many households have now adopted a lifestyle that depends on a dual income to maintain itself. If you’re in this situation, there might be some consequences of your life insurance decisions.

If something happened to you or your spouse, would the survivor still earn enough money to maintain their lifestyle? If the answer is no, consider how a life insurance policy might help.

Mortgage debt is big debt.

Mortgage debt in the United States is big – bigger than credit card or student loan debt. Still, mortgage debt is “healthy” debt assuming the growing equity in a home makes it worthwhile.

But mortgage debt can become a problem if a household’s income takes a hit. Life insurance can protect families from this risk by helping to pay off a mortgage, should something happen to you or your spouse. Either a term life policy or a special mortgage life policy can be used to pay off a mortgage.

Mortgage life insurance can be a nice layer of protection for couples that don’t have children but do have a mortgage.

Life insurance can be used as a savings tool.

Many life insurance policies offer a cash value. This means that certain policies can be cashed in whether or not a death has occurred. In this way, a life insurance policy can act as a savings tool.

Couples without children can pay into their policy in the form of the premiums, and then cash it out for a retirement dream: a new home, a hobby business, or an extended vacation. Using life insurance as a savings tool can offer tax benefits, a guaranteed savings method for the “savings challenged”, and a creative way to finance a dream. In short, it’s a savvy use of life insurance for couples who don’t have kids.

Funeral expenses can wipe out an emergency fund.

A life insurance policy can help cover funeral expenses for you or your spouse. This is one of the most common uses of life insurance. The average funeral today can cost between $7,000 and $10,000. That’s enough to wipe out an emergency fund, or seriously deplete it.

Having a life insurance policy in place can help cover expenses if you or your spouse were to pass away unexpectedly, so you can leave your fund for the day-to-day difficulties intact.
​
Whether you have children or not, a sudden illness or loss of a breadwinner can have lasting consequences for the loved ones you leave behind. Taking advantage of a well-tailored life insurance policy to shield them from an unnecessary financial burden if something were to happen is one of the best gifts you can give.

​ The average cost of a wedding in the U.S. is $30,000 - crazy high, in my opinion, that amount might be enough for a down payment on a first home!

Having cold feet about shelling out that much cash for one day’s festivities? Or even worse, going into debt to pay for it? Here are a few ideas on how you can make your wedding day a special day to remember while still saving some of that money for other things.

Invite Close Friends and Family
Many soon-to-be newlyweds dream of a massive wedding with hundreds of people in attendance to honor their big day. But at some point during any large wedding, the bride or the groom – or maybe both – look around the well-dressed guests and ask themselves, “Who are all of these people, anyway?”

​You can cut the cost of your wedding dramatically by simply trimming the guest list to a more manageable size. Ask yourself, “Do I really need to invite that kid who used to live next door to our family when I was 6 years old?” Small weddings are a growing trend, with many couples choosing to limit the guest list to just close friends and immediate family. That doesn’t mean you have to have your wedding in the backyard while the neighbor’s dog barks during your vows – although you certainly can. It just means fewer people to provide refreshments for and perhaps a less palatial venue to rent.

Budget According to Priorities
Your wedding is special and you want everything to be perfect. You’ve dreamed of this day your entire life, right? However, by prioritizing your wish list, there’s a better chance to get exactly what you want for certain parts of your wedding, by choosing less expensive – but still acceptable – options for the things that may not matter to you so much. If it’s all about the reception party atmosphere for you, try putting more of your budget toward entertainment and decorations and less toward the food. Maybe you don’t really need a seven-course gourmet dinner with full service when a selection of simpler, buffet-style dishes provided by your favorite restaurant will do. My little sister had a soup and charcuterie spread AND she asked several family members to bring a crock pot full of their favorite soup. He bill was tiny compared to other weddings I've been to.

​Last month, I spent three day in Kansas City learning about retirement plans.

I know this doesn't create a lot of "wow" factor for most, but I felt honored as I sat the feet of some of the insurance industry's greatest leaders. Ron Essary (pictured above) is one of the masterminds of annuities. He is sought after by insurance carriers to create retirement plans that will provide bonuses, life-time income, safety from the market, doubling factors (should the client get sick), etc. He is often referred to as the mad scientist of the annuity world and I feel a little smarter for being taught by him.

The good news for you, is that I came back with information that YOU should know about. The American retirement atmosphere has had some significant changes. I've listed a few below.

SECURE 2.0 legislation, a follow up to the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, was passed as part of an omnibus appropriations bill on Dec. 29, 2022. This new wave of retirement reform is designed to help more Americans reach retirement with more savings. The following summary can help you get up to speed and modify plans to better secure your future.

RMD Age Raised
The age for taking required minimum distributions (RMDs) increased from 72 to 73 on Jan. 1, 2023. Anyone who has already begun taking RMDs from 401(k) plans or traditional IRAs must continue doing so. The RMD age will rise to 75 in 2033.

Emergency Withdrawal Opportunities
New rules allow one annual distribution of up to $1,000 from a retirement account without penalty. Larger withdrawals may be made for terminal illness, natural disasters, long-term care or other specific financial emergencies.

Catch-Up Contributions Increased
Clients aged 60-63 can add the greater of $10,000 ($5,000 for SIMPLE Plans) or 150% of the current regular catch-up contribution in 2025. The increased amounts are indexed for inflation after 2025.

529 Plan Changes
Effective in 2024, beneficiaries can roll over up to $35,000 from a 529 plan to their Roth IRA, subject to Roth IRA annual contribution limits assuming the 529 account has been open for 15+ years.

“Rothification” Trends
In 2024, Roth assets in an employer-sponsored plan will be exempt from lifetime RMDs. SEP and SIMPLE plans can allow Roth contributions beginning in 2023.

Student Loan Match
Starting in 2024, employers will be able to count student loan payments as plan contributions eligible for the employer match in a retirement account.

Expanded Auto-Enrollment
Beginning in 2025, employers are required to auto-enroll eligible employees to the new 401(k) or 403(b) plans. Long-term, part-time workers will also be allowed to participate in such employer plans.

Front Range Insurance Solutions offers a variety of safe-money retirement plans. Please reach out if you'd like to know more.

​Perusing the search engine results for “allowance for kids” reveals something telling: The top results can’t seem to agree with each other.

Some finance articles quote experts or outspoken parents hailing an allowance, stating it teaches kids financial responsibility. Others argue that simply awarding an allowance (whether in exchange for doing chores around the house or not) instills nothing in children about managing money. They say that having an honest conversation about money and finances with your kids is a better solution.

According to a poll, the average allowance for kids age 4 to 14 is just under $9 per week, about $450 per year. By age 14, the average allowance is over $12 per week. Some studies indicate that, in most cases, very little of a child’s allowance is saved. As parents, we may not have needed a study to figure that one out – but if your child is consistently out of money by Wednesday, how do you help them learn the lesson of saving so they don’t always end up “broke” (and potentially asking you for more money at the end of the week)?

There’s an app for that.
Part of the modern challenge in teaching kids about money is that cash isn’t king anymore. Today, we use credit and debit cards for the majority of our spending – and there is an ever-increasing movement toward online shopping and making payments with your phone using apps like Apple Pay, Android Pay, or Samsung Pay.

This is great for the way we live our modern, fast-paced lives, but what if technology could help us teach more complex financial concepts than a simple allowance can – concepts like how compound interest on savings works or what interest costs for debt look like? As it happens, a new breed of personal finance apps for families promises this kind of functionality.

FamZoo is popular, offering prepaid cards with a matching family finance app for iOS and Android. Prepaid cards are a dime a dozen but FamZoo’s card and app do much more than just limit spending to the prepaid amount. Kids can earn interest on their savings (funded by parents), set budgets according to categories, monitor their account activity with useful charts, and even borrow money – complete with an interest charge. Sounds a bit like the real world, doesn’t it? FamZoo can be as simple or as feature-packed as you’d like, making it a good match for kids of any age.

Money habits are formed as early as age 7. If an allowance can teach kids about saving, compound interest, loan interest, and budgeting – with a little help from technology – perhaps the future holds a digital world where the two sides of the allowance debate can finally agree. As to whether your kids’ allowance should be paid upon completion of chores or not… Well, that’s up to you and how long your Saturday to-do list is!

Perusing the search engine results for “allowance for kids” reveals something telling: The top results can’t seem to agree with each other.Some finance articles quote experts or outspoken parents hailing an allowance, stating it teaches kids financial responsibility. Others argue that simply awarding an allowance (whether in exchange for doing chores around the house or not) instills nothing in children about managing money. They say that having an honest conversation about money and finances with your kids is a better solution.

According to a poll, the average allowance for kids age 4 to 14 is just under $9 per week, about $450 per year. By age 14, the average allowance is over $12 per week. Some studies indicate that, in most cases, very little of a child’s allowance is saved. As parents, we may not have needed a study to figure that one out – but if your child is consistently out of money by Wednesday, how do you help them learn the lesson of saving so they don’t always end up “broke” (and potentially asking you for more money at the end of the week)?

​Life Insurance

• Survivorship

A survivorship life insurance policy is a type of joint insurance policy (a policy built for two).You may not have thought much about that type of insurance before, or even knew it existed. But joint policies, especially survivorship policies, are important to consider because they can provide for heirs, settle estates, and pay for final expenses after both spouses have passed.
Most joint life insurance policies are what’s known as “first to die” policies. As the unambiguous nickname suggests, a first to die policy is designed to provide for the remaining spouse after the first passes.
A joint life insurance policy is a time-tested way of providing for a remaining spouse. But without careful planning, a typical joint life policy might leave a burden for surviving children or other family members.
A survivorship life insurance policy works differently than a first to die policy. Also called a “last to die” policy, a survivorship policy provides a death benefit only when both insured spouses have passed. A survivorship policy doesn’t pay a death benefit to either spouse but rather to a separate named beneficiary.
You’ll find survivorship life insurance referred to as:

• Joint Survivor Life Insurance
• Second-to-Die Life Insurance
• Variable Survivorship Insurance

Survivorship life insurance policies are sometimes referred to by different names, but the structure is the same in that the policy only pays a benefit after both people insured by the policy have died.
Reasons to Buy Survivorship Life InsuranceWe all have our reasons for buying a life insurance policy, and often have someone in mind who we want to protect and provide for. Those reasons often dictate the best type of policy – or the best combination of policies – that can meet our goals.
A survivorship policy is well-suited to any of the following considerations, perhaps in combination with other policies:

• Final expenses
• Estate taxes
• Lingering medical expenses
• Payment of debt
• Transfer of wealth

It’s also most common for a survivorship life insurance policy to be a permanent life insurance policy. This is because the reasons for using a survivorship policy, including transfer of wealth, are usually better served by a permanent life policy than by a term insurance policy. (A term life insurance policy is only in force for a limited time and doesn’t build any cash value.)
Benefits of Survivorship Life Insurance

• A survivorship life policy can be an effective way to transfer wealth as part of a financial strategy.
• Life insurance can be difficult to purchase for individuals with certain health conditions. Because a survivorship life insurance policy is underwriting coverage based on two individuals, it may be possible to purchase coverage for someone who couldn’t easily be insured otherwise.
• As a permanent life insurance policy, a survivorship life policy builds cash value that can be accessed if needed in certain situations.
• Costs can be lower for a survivorship life policy than insuring two spouses individually.

The good news is that life insurance rates are more affordable now than in the past. That’s great! But keep in mind, your life insurance policy – of any type – will probably cost less now than if you wait for another birthday to pass for either spouse insured by the policy.

​Sometimes life insurance doesn’t get the credit it deserves.

Most of us know it’s used to replace income if the worst were to happen, but that’s about it. This week, I have had several appointments with money savvy twenty-something year olds who were pleasantly surprised to find out how much of a benefit life insurance can be to them right now. 

Life insurance can be a multi-faceted financial tool that has many interesting applications. In fact, there’s probably a life insurance policy for most every person or situation.

Read on for some uses of life insurance you may be able to take advantage of when you’re young – you might find some interesting surprises!

Loan collateral

If you have your eye on entrepreneurship, life insurance can be of great service. Some types of business loans may require you to have a life insurance policy as collateral. If you have an eye on starting a business and think you may need a business loan, put a life insurance policy into place.

Pay off debt

A permanent life insurance policy has cash value. This is the amount the policy is worth should you choose to cash it in before the death benefit is needed. If you’re in a financial bind with debt – maybe from unexpected medical expenses or some other emergency you weren’t anticipating – using the cash value on the policy to pay off the debt may be an option. Some policies will even let you borrow against this cash value and repay it back with interest. (Note: If you’re thinking about utilizing the cash benefit of your life insurance policy, talk to a financial professional about the consequences.)

Charitable spending

If a certain cause or charity is near and dear to you, consider using the death benefit of a life insurance policy as a charitable gift. You can select your favorite charity or nonprofit organization and list them as a beneficiary on your life insurance policy. This will allow them to receive a tax-free gift when you pass away.

Leave a legacy of wealth

A life insurance policy can serve as a legacy to your beneficiaries. Consider purchasing a life insurance policy to serve as an inheritance. This is a good option if you are planning on using most or all of your savings during your non-working retirement years.

Mortgage down payment

The cash value of a whole life policy may be able to be used for large expenses, such as home buying. A whole life policy can serve as a down payment on a home – for you or for your children or grandchildren.

Key man insurance

Key man insurance is a useful tool for businesses. A key person is someone in your business with proprietary knowledge or some other business knowledge on which your business depends.

A business may purchase a life insurance policy on a key man (or woman) to help the business navigate the readjustment should that person die unexpectedly. A life insurance policy can help the business bridge that time and potential downturn in income, and help cover expenses to deal with the loss.

Financing college education

With the rising cost of college tuition, many families are looking for tools to finance their children’s college education. You may consider using the cash value of your life insurance policy to help with college tuition. Just remember to account for any possible tax implications you may incur.

Life insurance policies have many uses. There are great applications for young people, business owners, and just about anyone. Talk to a financial professional about your financial wishes to see how a life insurance policy can work for you.