Our experience with mortgages has made us aware of the huge sums of money that so many people are paying due to lack of understanding in this field as well. The insurance market in Israel enjoys billions in annual revenues, and here too, the name of the game as far as the insurance companies is “profitability goals.” As of 2015, we have been assisting our clients in saving money on their savings and insurance policies as well.
? WHY PAY MONEY FOR CONSULTATIONS
? WHY PAY MONEY FOR CONSULTATIONS
Our Distinction
HOW CAN I KNOW WHAT INSURANCE POLICIES I HAVE AND HOW MUCH I AM PAYING FOR THEM? – A SHORT EXPLANATION OF THE WORLD OF INSURANCES:
The world of insurances in Israel is run primarily by insurance brokers. The brokers are essentially the mediators between the insurance companies and the clients. Over the last few years, a large chunk of the insurance market was “captured” by large agencies (such as Yashir), in which the broker mediating between the client and the insurance companies is whichever phone agent is currently on call. There is no specific agent that can be approached.
While guiding our clients through the mortgage process, we are shocked to discover that one of the highest and least calculated expenses for many of them is their payments on the insurance policies, while in many cases the client had no idea how much he is paying and what coverage he is receiving in return for the huge payments he is making!
The insurance companies use aggressive marketing techniques. Brokers receive a commission for every policy they sell. The commission automatically continues throughout the duration of the policy, so that a broker who has managed to create a large enough insurance “portfolio” can, theoretically, spend his days at the beach while the commissions will continue to be deposited into his account every month on a regular basis. This obviously creates a strong impetus for the broker to expand his portfolio as much as possible. Most brokers work with two or three regular companies. The companies have marketers that are constantly approaching the brokers with attractive offers of high rewards for life/health/LTC insurance policies sold within a month. A diligent agent will usually call those people who trust him most – a brother, cousin, neighbor, good friend – warmly recommend the new policy, and then quickly issue the policy after the client approves, saying “I trust you.”
As far as the agent is concerned – the client got a policy that may well help him in the future, in case of a devastating illness or other tragedy. As far as the client – a new charge will appear in his account and a new report will be sent to his email annually, and he won’t quite know what it is about or whether he may even already have a similar plan among the varied other insurance policies he had purchased in the past.
While guiding our clients through the mortgage process, we are shocked to discover that one of the highest and least calculated expenses for many of them is their payments on the insurance policies, while in many cases the client had no idea how much he is paying and what coverage he is receiving in return for the huge payments he is making!
So What Can We Do?
As part of our guidance and responsibility toward our clients, we would draw their attention to this fact and suggest that they approach the insurance company and ask for a better offer. Once we realized that some of our clients forgo this added investigation due to time constraints, others merely return to the same broker who had arranged their previous policy and make only minor changes – for obvious reasons, while only a small number of people actually investigate and improve their insurance portfolios, we decided to personally offer this service to our clients.
For two years, we conducted a pilot test with a number of insurance agencies to whom we referred our clients, on two conditions: First, the agency must work with all insurance companies. Second, the agent will apply the maximum discounts available in the market to our clients’ policies.
After two years, during which we experienced many disappointments from a number of agents, we decided to conduct the test among the companies ourselves, and verify the improvement of all our clients’ insurance portfolios.
Our goal is to lower the client’s costs and ensure that there are no duplications (such as between the kupat cholim [HMO] coverage and private health insurance). There are a number of factors characterizing the test we perform for our clients and our obligations to them in comparison with insurance brokers:
We deal only with policies in which the potential savings is significant, such as: life, health, LTC insurances and pension and financial savings plans.
We compare between all insurance companies.
We do not “produce” policies upon (reward-based) initiatives by the companies to the agents – we proactively tailor a policy for those clients who are interested, based on the client’s needs and not on the marketing efforts of the companies or on personal relationships with them. We are not directly connected to the companies’ marketers.
With regard to mortgage life insurance policies, since the insurance companies concentrate the main discounts into the first two years, when we compare the price offers of the different insurance companies on behalf the client, we focus only on the first two years of the plan. After two years, we call the client with an offer to refinance and receive a new plan with better terms. This, in contrast to other insurance companies whose goal is to settle on a permanent insurance policy for the entire duration of the mortgage loan, with the monthly return increasing over time –a fact that the client is generally not aware of. In addition, the different agencies do not bother to remind the client that he must refinance, since it is in their interest that the original plan will continue with its higher interest rates.
We are constantly working to ensure that our clients will be aware of the sums they are paying, and be sure that they are not shelling out money unnecessarily.
To check your insurance portfolio free of charge, contact us using the contact form at the bottom of the page, or call our offices: 072-2798830 ext. 4.
Mortgage Life Insurance
RULES FOR MORTGAGE LIFE INSURANCE
Nobody is promising us that we will live forever, and nobody is promising us that we will succeed in repaying the entire mortgage loan before we pass on.
The banks, however, are aware of the fact that a mortgage’s “shelf life” spans many years, during which the borrower undergoes many upheavals, and that death is something that may happen too. In order to be sure that the money owed to it will indeed be repaid, the bank (rightfully) demands that the borrower buy a life insurance to cover a case of death, so that the bank will not have to suffer financial loss if that happens.
Mortgage insurance is an inseparable part of any mortgage loan, since it is designed to ensure that the bank will receive a repayment of the loan in case of tragedy. The insurance policy is comprised of home insurance in case of damage to the property, as well as life insurance. The purpose of the mortgage loan is ultimately to insure the bank’s money and to make sure that the mortgage payment will not remain the responsibility of the mourning family members.
Mortgage insurance is different than regular life insurance in a number of ways:
The covered sum must be commensurate with the sum of the loan for each of the borrowers;
The insurance sum decreases along with the repayment of the mortgage principal over the years, and is calculated based on the loan terms;
In a case of death, etc., the entire insurance sum will be used to cover the mortgage.
During our many years in the business, we supported clients who have sadly lost a spouse and learned a number of lessons from the insurance companies’ conduct, leading us to begin handling our clients’ mortgage life insurance policies as well. Following are some of the basic rules that we have learned from past experience and which guide us in our work:
Researching all insurance companies to find the option with the lowest monthly fee;
Life insurance must be made through an agent, not through one of the giant agencies in which the entire correspondence is with the telephone sales representative. When it is time to claim the insurance, only an agent who knows and cares about us will make sure that the mortgage payment by the insurance company will be accomplished immediately and without extraneous investigations to burden the mourning family.
Refinancing the life insurance policy approximately every two years (provided there was no decline in the insured’s health) in order to take advantage of the constant market changes and the fact that the insurance companies concentrate the bulk of the discounts during the first two years.
To receive the best mortgage insurance in the market or to check your current plan, contact us through the contact form or call our offices: 072-2798830, ex. 4.
Life Insurance
PRESENTING YOU WITH THE OFFER BEST SUITED FOR YOU
A life insurance is an insurance that was designed to provide family members with financial security in the case of the insured person’s death. The difference between this insurance and other insurances is that you determine the insurance amount.
The basic goal of a mortgage insurance is to protect your loved ones from financial difficulty in case of death, disability, or critical illness to you as the breadwinner – circumstances that generally lead to extreme changes to the family’s lifestyle and impaired income, perhaps leading to their inability to meet the mortgage payments as you had been doing until then.
There are various types of life insurances, incorporating savings plans as well, and their goal is to allow you to maintain your lifestyle even upon retirement. Our standards of living are based on the income that we generate. In a case of loss of earning capacity, for reasons such as death, Heaven forbid, or retirement – if we had not taken care to create alternative income for ourselves before then, we will be forced to lower our standards of living and enter a vicious cycle in a precarious financial situation that we are unaccustomed to.
What will happen to our standard of living if our spouse will no longer bring in the same income, due to death or loss of earning capacity? What will our standard of living be like after we retire?
Enter life insurance (or, as it is referred to in Israel, “risk life insurance”), ensuring that the standard of living that you and your loved ones are accustomed to will not change even under such circumstances. You can choose whether to purchase a risk life insurance plan as a basic mortgage insurance or as an additional coverage as part of any mortgage insurance policy.
Long Term Care Insurance
INSURANCE TODAY – SO THAT WE WILL NOT HAVE REGRETS TOMORROW
We all want to live long, peaceful lives together with our loved ones. Sometimes, however – and not necessarily due to old age – a person’s peaceful life can be disrupted by an unexpected event such as a car accident or disease that impairs his abilities and leaves him physically and/or emotionally crippled. Consequently, this person becomes dependent on others to nurse and care for him throughout all hours of the day. Long-Term Care (LTC) insurance is an insurance policy that addresses the needs that arise when a person is in need of nursing services; i.e. becomes highly dependent on others to perform the bulk of his daily activities.
The insurance case will be defined as at least one of the following two scenarios:
Poor physical health or functioning of the insured as a result of disease, accident, or health condition that results in his inability to independently perform a number of basic physical functions;
Poor health or function due to cognitive impairment as diagnosed by a physician who is an expert in the field. In this regard, “cognitive impairment” is an impairment to the insured’s cognitive activity and loss of his intellectual capacity: i.e. impaired insight and judgment, decline in long- or short-term memory, or disorientation to place or time requiring supervision during most hours of the day, as determined by a doctor who is an expert in the field, the reason being his state of health such as due to Alzheimer’s or other forms of dementia.
Approval for LTC insurance is contingent upon the applicant first filling out a health declaration. It is highly recommended to join such a plan early on in life, while you are still healthy.
Savings
A DIFFERENT TYPE OF SAVINGS PLAN
Tobolsky offers clients a unique savings plan, consisting of 100 % pure savings – no insurance fees!! Savvy clients will realize that this is the most attractive savings plan that the market currently has to offer – certainly in comparison to a bank’s or mutual fund.
The plan has a number of important advantages, among them:
The structure of the policy, which allows for investment even in non-marketable assets, unlike policies such as mutual funds/portfolios;
Minimal costs, avoiding safekeeping charges, buying and selling fees, sales load, trustee fees, and more;
Capital gains tax is paid only upon redemption. There is also no tax reckoning when switching between different investment tracks;
The plan allows for complete mobility, including high liquidity of the money at any time and the ability to combine and switch between tracks, all at no charge or tax reckoning;
Additional advantages such as the ability to appoint beneficiaries, place a lien on a policy, or perform various deposits and withdrawals from the plan;
Excellent performance in all tracks and parameters, including high yield, standard deviation, and Sharpe ratio.
Health Insurance
Israel’s healthcare system ensures that every citizen is covered by a minimal health insurance by paying a monthly fee to the Bituach Leumi (Israel National Insurance) and joining a kupat holim (HMO). Nevertheless, many of us actually have no idea what exactly the kupat holim covers and, even more importantly – what it does not cover. At the same time, many people purchase private insurance plans without conducting sufficient research and end up paying high monthly fees that actually offer little more than duplicate coverage, while the truly expensive and more important treatments are not covered by the policy.
We first became aware of this issue when one of our clients, a successful young man, told us that his baby daughter had been diagnosed with a serious tumor. Despite having been paying over 4500 ILS each month to various private insurance plans that he had purchased through his insurance agent, the treatments his daughter now required were not covered by any of these policies and he was forced to seek private funding for these treatments, costing hundreds of thousands of shekels.
We strongly recommend purchasing additional, specific and inexpensive private health insurance policies in a number of areas:
Life-saving drugs: In Israel, there is absolutely no way – regardless of proteksia, kupat holim or anything else – to obtain coverage for lifesaving drugs that are not included in the “health basket.” And there are many drugs that fall into that category.
Transplants: A kupat holim will only cover transplant surgeries for life-threatening conditions. The result is cardiac/kidney patients who are forced to undergo difficult medical treatments such as dialysis for many years until their condition deteriorates enough that they become eligible for the coverage for the transplant. A private insurance policy will cover a transplant surgery at a far earlier stage, saving the patient years of misery and failing health.
Private doctor: As a rule, various surgeries are covered by the kupot holim. However, a patient cannot generally choose the surgeon or hospital in which his surgery will take place. Israel is home to some of the leading doctors in the world in many different fields, but if they do not have a working agreement with the patient’s kupat holim, the patient will have to undergo the required surgery under the hands of a less-skilled surgeon.
Surgeries abroad: A short while ago, one of our clients was scheduled to undergo a surgery in one of Israel’s prestigious hospitals to remove a dangerous tumor. Our client contacted Rabbi Firrer (renowned medical adviser) who told her unequivocally that the surgery’s chances of success will be far higher if performed by a certain surgeon abroad. Quite understandably, the kupat holim was not willing to cover the expenses of this costly surgery and transportation when there was an alternative solution to be found in Israel. Using Rabbi Firrer’s recommendation and our client’s private insurance plan, we were able to be the bearers of good news, and the surgery and trip abroad were fully covered by the insurance company. Thank G-d, the surgery was successful and our client has since completely recovered.