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Life Insurance


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Life Insurance is usually last on the list of important-but-necessary items people want to spend money on, because let’s face it, no one wants to dwell on the circumstance of death.  In the wake of the recent recession people have even less insurance than before; which leaves families unprepared to cope with potential tragedy.  The universal perception behind life insurance is that it costs more than it actually does, so individuals and families think it won’t fit into their budget.   For example: A healthy 35 year old male can buy a 20-year term policy with a $250,000 payout for around $300 per year.   Pricing aside, the real question comes down to how much life insurance to take out.

How much life insurance you should have is a very personal decision.  Let’s try and closely estimate an amount of insurance that will provide the financial security that you consider important. A general rule of thumb is your life insurance coverage should equal 8-10 times your annual income.  Let’s see how it compares to the worksheet below.


Now that you have a picture of how much life insurance you need, let’s take a look at the different types of policies available to you.

Whole Life Insurance remains in force for the insured’s ‘whole life’ and requires premiums to be paid every year into the policy.  The policy pays a stated, fixed amount upon your death and part of your premium goes toward building cash value from investments made by the insurance company.  Cash value builds tax-deferred each year that you keep the policy, and you can borrow against the cash accumulation fund without being taxed.

Universal Life Insurance is also a type of permanent life insurance.  The excess of premium payments above the current cost of insurance is credited to the cash value of the policy.  The cash value is credited each month with interest, and the policy is debited each month by a cost of insurance charge, as well as any other policy charges and fees which are drawn from the cash value, even if no premium payment is made that month.  Interest credited to the account is determined by the insurer, but has a contractual minimum rate (often 2%).  When an earnings rate is pegged to a financial index such as a stock, bond or other interest rate index, the policy is an ‘equity indexed universal life’ contract.

  • Single Premium Universal Life is paid for by a single, substantial, initial payment.  Some policies do not allow any more than the one premium contractually, and some policies are casually defined as single premium because one premium was intended to be paid.
  • Fixed Premium Universal Life is paid for by periodic premium payments associated with a no lapse guarantee in the policy.  Sometimes the guarantees are part of the base policy and sometimes the guarantee is an additional rider to the policy.  Generally these payments will be for a shorter period of time than the policy is in force; for example payment may be made for 10 years, with the intention that thereafter the policy is paid-up.  But it can also be permanent fixed payment for the life of the policy.
  • Flexible Premium Universal Life allows the policyholder to vary their premiums within certain limits.  Inherently Universal Life policies are flexible premium, but each variation in payment has a long term effect that must be considered.  In order to remain active, the policy must have sufficient available cash value to pay for the cost of insurance.  Higher than expected payments could be required if the policyholder has skipped payments or has been paying less than originally planned.  It is recommended that yearly illustrative projections be requested from the insurer so that future payments and outcomes can be planned.

Variable Life Insurance provides permanent protection to the beneficiary upon the death of the policy holder.  This type of insurance is generally the most expensive type of cash-value insurance because it allows you to allocate a portion of your premium dollars to a separate account comprised of various instruments and investment funds within the insurance company’s portfolio such as stocks, bonds, equity funds, money market funds and bond funds.  In addition, because of investment risks, variable policies are considered securities contracts and are regulated under the federal securities law; therefore, they must be sold with a prospectus.  The major advantage to variable policies is that they allow you to participate in various types of investment options while not being taxed on your earnings (until you surrender the policy).  You can also apply the interest earned on these investments toward the premiums, potentially lowering the amount you pay.  However, due to investment risks, when the invested funds perform poorly, less money is available to pay the premiums, meaning that you have to pay more than you can afford to keep the policy in force.  Poor fund performance also means that the cash and/or death benefit may decline, though never below a defined level.  Also, you cannot withdraw from the cash value during your lifetime.

Term Life Insurance provides coverage at a fixed rate of payments for a limited period of time, the relevant term.  After the term expires, coverage at the previous rate of premiums is no longer guaranteed and the client can potentially obtain further coverage with different payments or conditions.  If the life insured dies during the term, the death benefit will be paid to the beneficiary.  Term life insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.


  • A version of term insurance is annual renewable term (ART).  In this form , the premium is paid for one year of coverage, but the policy is guaranteed to be able to be continued each year for a given period of years.  This period varies from 10 to 30 years, or occasionally until the age of 95.  As the insured ages, the premiums increase with each renewal period, eventually becoming financially unviable as the rates for a policy would eventually exceed the cost of a permanent policy.
  • A more common form of term life is guaranteed level premium term life insurance, where the premium is guaranteed to be the same for a given period of years.  The most common terms are 10, 15, 20, and 30 years.  In this form, the premium paid each year remains the same for the duration of the contract.  Most term life policies include an option to convert the term life policy to a Universal Life or Whole Life policy.  This option can be useful to a person who acquired the term life policy with a preferred rating class and later is diagnosed with a condition that would make it difficult to qualify for a new term policy.  The new policy is issued at the rate class of the original term policy. (Note that this right to convert may not extend to the end of the Term Life policy.  It may extend a fixed number of years or to a specified age, such as convertible to age 70.)
  • Return Premium Term Life Insurance is a form of coverage that provides a return of some of the premiums paid during the policy term if the insured person outlives the duration of the term life insurance policy.

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Recent News

Common ERISA Penalties by the DOL – 2017

DOL image

The Department of Labor recently released their inflation-adjusted penalties for ERISA, the Family Medical Leave Act, and the Genetic Information Nondiscrimination Act.

The chart below shows some of the more common penalties assessed from DOL audits.

Failure to provide a summary of benefits and coverage$1,105 per employee
Failure to inform employees of CHIP coverage opportunities$112 per employee per day
Failure to comply with FMLA notice requirements$166 per employee per day
Failure to comply with certain GINA requirements$112 per employee per day
Failure to provide an SPD or plan document$110 per employee per day
Failure to provide documents to the DOL upon request$149 per day, not to exceed $1,496 per request
Failure to file an annual 5500 form$2,097 per day

The new ERISA penalties serve as important reminders to employers who sponsor benefit plans.  Many employers either think they are too small to be audited (not true), or that the medical carriers adhere to all the rules and furnish employees with what is required (not true).  It is for this reason that we have taken on the responsibility to protect our clients by providing them with the proper notices and instructions to maintain compliance.

Withdraw Dependent Coverage – COBRA Rules and the Pay or Play Provision


With healthcare premiums continuously increasing year over year, many employers are searching for options to help reduce their benefit costs. A seemingly quick fix would be to eliminate dependent coverage, but you may want to consider eliminating dependent contribution rather than not offering coverage at all.

First and foremost, the circumstances are different for Small Groups in comparison to Applicable Large Employers. If you are considered an ALE, with 51 or more full time equivalent employees, then you are required to offer dependent coverage by law, or you may face an employer shared responsibility penalty. Please note that the definition for Small Group plans has been expanded to include up to 100 employees, so it is possible to be an Applicable Large Employer and still offer Small Group plans (51-100 employee size). Per the Affordable Care Act, and the ‘pay or play’ provision, the definition of ‘dependent’ only applies to children under the age of 26. Spouses are not considered dependents, nor are step children or foster children.

There are two types of penalties you may face if you do not offer proper coverage as an ALE.

  • If you DO NOT offer minimum essential coverage to at least 95% of your full time equivalent employees and their dependents then you may face a penalty if at least one of your employees obtains premium assistance from the public marketplace (Covered CA). If just one of your employees receives premium assistance, then you are liable for a $2,000 penalty for each employee, after the first 30 employees. [Total employees – 30, multiplied by $2,000]
  • If you DO offer minimum essential coverage to at least 95% of your full time equivalent employees and their dependents, then you may still be imposed a penalty if any employee receives premium assistance from the marketplace. If coverage is offered, but turns out to be unaffordable (more than 9.66% of household income), the employee has the option to purchase coverage and receive premium assistance. The employer in this instance will be penalized $3,000 for each employee that receives the premium tax credit.

If you are considered a Small Employer with 50 or less full time equivalent employees, then it is not a requirement for you to offer dependent coverage. If you elect to eliminate dependent coverage at renewal altogether, then you do not need to offer COBRA since terminating or amending the group health plan does not constitute a listed triggering event.

Dependents are only offered COBRA if:

  • Employment is terminated
  • Employee hours are reduced
  • Employee passes away, divorces, or legally separates
  • Employee obtains Medicare
  • Loss of dependent child status

SPD Requirements – Erisa Wrap Compliance


The Employee Retirement Income Security Act (ERISA) oversees group benefit plans, and with the onset of the Affordable Care Act, the ERISA Summary Plan Description (SPD) requirements are in the spotlight.  More often than not, a plan administrator assumes that a Certificate of Insurance qualifies as an SPD, and that either the insurance company or their broker is responsible for preparing and delivering SPD’s.  In this instance, the employer (plan administrator) is solely responsible for ERISA compliance.

An employer must have a written SPD, which serves as the main vehicle for communicating plan rights and obligations to participants and beneficiaries.  An SPD that includes the plan’s terms and conditions, such as a Certificate of Coverage, and includes (or ‘wraps’) it with the specific ERISA disclosure language is considered a ‘Wrap SPD.’  One step further would be to produce a mega-wrap document which would encompass all benefit lines into one document, which is HIPAA compliant as long as none of the benefits are self-funded.

ERISA requires that a SPD be distributed to enrolled participants within 90 days of coverage, or 120 days of a new plan being established.  If an SPD has not changed, an employer is required to furnish another copy to all participants every five years.

An example of some of the information required in an SPD:

  • Plan name
  • Employer’s name and address
  • Employer’s EIN
  • Plan Administrator’s name, address, and phone number
  • Type of plan and description of benefits
  • Effective and End Dates of the plan
  • Eligibility terms
  • How refunds are allocated to plan participants
  • Claims procedures
  • ERISA legal disclosure of participants’ rights
  • Sources of plan contributions
  • Details descriptions of plan provisions and exclusions
  • Information regarding COBRA, HIPAA, and other federal mandates
  • Summary of Benefits (SBC)

While it may be a bit overwhelming if your group is not currently in compliance – we are here to help.  We offer all of our clients a Wrap SPD that is co-developed and maintained by a major ERISA law firm, and has successfully passed DOL audits.

Feel free to contact us to ensure your group is in compliance.


Due to difficulties with the Covered California website, I thought I was never going to get healthcare coverage. I saw the website for Shop CA Brokers and the contact information. I connected with Bryan Bedrosian and now have health care. He sent me the application form for coverage and walked me through the entire process. He kept me up todate, along with giving me step by step instructions on the process. He was patient and informative. I highly recommend Ryan if you need any assistance!

Jane M.

San Francisco, CA

I spent a whole week trying to figure out how Obamacare actually worked through the Covered CA website. Just when I thought I had it all figured out with my subsidy and the plan I was going to choose, I DID NOT QUALIFY!  I couldn’t believe it, I spent at least 8 hours on the computer this past week doing everything I was requested to do, and in the end all it did was frustrate the living heck out of me.  I was about to give up and just go without insurance as I have in the past, but my wife randomly found the phone number to Benefit Agents and I was connect with Arman.  In 2 minutes he knew exactly what was wrong with my application and was able to walk me though the process of designating him as my agent.  He was then able to view my application through his computer and made the necessary fixes and got my wife and I enrolled.  5 minutes compared to 8 hours.  These guys deserve a lot more praise than any agent I’ve spoken to in the past.  5 star service, I highly recommend them to anyone.

Alex M.

Los Angeles, CA

I needed to have covered California insurance for my daughter and her family inasmuch is my son-in-law does not have the time to make the necessary inquiries due his work schedule. Ryan Bedrosian name came up on the computer screen and fortunately for me because he was able to facilitate the application to be submitted for covered California. Needless to say it was truly gut wrenching experience trying to contact covered California,however, we were able to resolve everything to my satisfaction. What I liked most was his willingness to accept all my phone calls, as busy as he is.

Martin C.

Palm Desert, CA

I submitted a new application on CoverCa website and was waiting for more than 3 weeks without any news or progress.

The application was stuck at Eligibility check stage. At that time I was desperate for help and called the CoverCa tool free number and waited over 1 hr and still cannot go thru. The same goes for their website’s chat that has 150 to 200 people waiting and would eventually kick you out of their system.

According to CoverCA health cost estimate tool, our family of 4 should be getting a few hundreds dollars of subsidies per month but after I went thru the whole online enrollment process at CoverCA, the system quoted me a ZERO subsidies per month!!!

So, thru. Google Ads, I found Bardia Farhadian from Benefit Agents. With my permission, he was able to see my case on his computer. He then step thru. all the info I have previously submitted and made a few minor but “critical” corrections.

Finally he performed the “M A G I C     T O U C H” by calling the broker’s dedicated support team / specialist inside of CoverCA and I got a call the next day with a Cover CA case number.

We were very happy that we also received the correct amount of subsidies and this alone is a great deal of money, over $4500 per year!!!

With this case number, I was told to wait about 5 days and call BlueCross for enrollment. I am now enrolled and have the peace of mind…

Overall, the process was very smooth, Mr. Farhadian was very professional and patient and informative. Thanks so much for your professional service!!!

p/s: He also saved me $400 (per year) plus for Auto Insurance!!!

I seldom give review but thru Yelp I was able to get very valuable consumer advises and save time filtering out the GOOD companies to do business with. Benefit Agents is definitely one of the good companies out there and one that will get the job done and save you a lot of $$$$ and time.

Joe A.

Rowland Heights, CA

If you have questions about Covered CA, the private insurance market or are thinking about making a change to your existing policy, then you need to call Ryan at SHOP CA Brokers.   He knows all the little details about Covered CA and the private insurance market that other agents won’t disclose to you or just do not know. I called at least five different San Francisco insurance agencies before I found Ryan. He streamlined the process in less than 15 minutes by asking if I qualified for subsidies through Covered CA. I am in between jobs at the moment and could still be unemployed in January 2014. At least I have the comfort of knowing that the government will help pay my premium if I cannot find work but then. In the meantime, Ryan helped me find a Blue Shield high-deductible HSA plan that is $130/month that will allow me to see all of my current doctors. Then toward the end of the year I will re-evaluate my situation. I am excited to have a new medical plan and wonderful new broker that will be there for me when my situation changes.

Also, it is important to note that Ryan did not try to push me off the phone when I kept asking questions.  I still email him from time to time to get his take on certain policy provisions and he still responds quickly (in less than an hour).  A+++++ Service.

Gwen O.

Oakland, CA

I’m so glad I selected Ryan to steer me through the process of signing my wife up for Obama Care via Covered CA. Even though the online enrollment process is FUBAR for both the federal and state sites I finally had success thanks to Ryan’s guidance.

Just as an example Covered CA asked for additional documentation regarding household income and citizenship for my wife who is Canadian. The site gave 3 methods  for providing this documentation: 1- Download to the site but the site does not have any provision to do so; 2- Snail mail (which wouldn’t work because the deadline for them receiving it was only 2 days from the date I received the request), and; 3- FAX it (but I have no access to a FAX machine since I am currently in Mexico)
Ryan’s solution to this dilemma was for me to send him the documents as an attachment to an email to him which is what I did. In turn he Faxed all 6 pages to Covered CA before the deadline and Kaiser was able to accept the first payment and my wife is now a member there.

Bob D.

Chula Vista, CA

Platinum 90


Gold 80


Silver 70

Silver 70

Bronze HSA


Bronze 60


Enhanced Silver 73 Policy

Silver 73

Enhanced Silver 87 Policy

Silver 87

Enhanced Silver 94 Policy

Silver 94

Eligibility Chart

Your FPL must be between 138%-400% to qualify.

FPL chart 2016

Your FPL must be between 138% -400% to qualify.

FPL chart 2016

Qualifying Life Events

A Qualifying Life Event would be considered:

  • Marriage, having a baby, adopting a child or placing a child for adoption or foster care, moving outside your
    insurer’s coverage area, gaining citizenship, leaving incarceration.
  • Gaining status as member of an Indian tribe. Members of federally recognized Indian tribes can sign up for or
    change plans once per month throughout the year.
  • For people already enrolled in Marketplace coverage: Having a change in income or household status that affects
    eligibility for premium tax credits or cost-sharing reductions.
  • Losing other health coverage—due to losing job-based coverage, divorce, the end of an individual policy plan year
    in 2014, COBRA expiration, aging off a parent’s plan, losing eligibility for Medicaid or CHIP, and similar
    circumstances. Important: Voluntarily ending coverage doesn’t qualify you for