Adapting insurance to client portfolio growth

Have you ever thought of “laddering” LTC policies? This is something that we do all the time in the term life space. It’s an attractive way to design a life insurance strategy because as life goes on your assets increase, which allows for a greater ability to self-fund. Instead of buying $2 million for 30 years, you buy $1 million for 30 years and $1 million for 15 years. For a 40-year-old client that's $2 million of benefits if they die in the first 15 years. Or $1 million if they die in that period between 55-70. And no death benefit if they live past 70. We can anticipate that the need for insurance will change over time and we adapt around that change. We can apply a similar strategy to LTC, especially for those clients who like the value of a hybrid but also like the inflation rider on a tax-qualified LTC plan. We call it “stacking.” What does this look like for someone buying at age 40 today? Maybe starting with a simple hybrid plan for $250k--impactful during their working years. This hybrid allows for an acceleration of death benefit for care needs at a rate of 2% or 4% of the $250k death benefit. That means a $250k hybrid policy with 4% acceleration can result in a 25-month benefit of $10k/month. Great coverage for a short duration claim in the near-term but doesn’t address inflation or the long-tail risk. $250k of OPM (other people’s money) can still help preserve some assets from the retirement account and help you come up with a more defensive asset distribution strategy. Some clients prefer to self-fund the inflationary risk as their assets grow with inflation. However, stacking on a traditional LTC plan at the same time, or even at age 55, can help cover the balance of the projected LTC expenses. Brokers with underwriting experience will astutely point out that waiting to stack policies absolutely relies on the insurability of the client--not something we like to "bank on." But if this strategy results in the difference between some planning today versus no planning today, then I'm all for it. Remember: you don't always have to pressure your clients to come up with the final decision written in blood and stone TODAY. A good plan will evolve with the clients’ needs.

Not too long ago, many real estate investors treated insurance as a formality. I just spent an hour learning why that’s a big mistake. Every week, I meet with 3 business partners to evaluate investment opportunities. Lately, we’ve started inviting experts to join our calls — to stress-test our thinking and learn from people in the know. Two weeks ago, we spoke with Chip Burtner from USI Insurance Services. He walked us through what underwriting actually looks like from an insurer’s perspective. And it completely reframed how we think about risk. Here are my 3 key takeaways: 𝟭. 𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝗵𝗼𝘄 𝘆𝗼𝘂𝗿 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗶𝘀 𝘂𝗻𝗱𝗲𝗿𝘄𝗿𝗶𝘁𝘁𝗲𝗻 Carriers look beyond the rent roll. They assess loss runs, income, insurable value, property age and square footage. Older assets often need surplus lines carriers - higher premiums, fewer options. If you don’t account for the risks they prioritize like building age, claim history, and system obsolescence you risk surprises in coverage or pricing ___ 𝟮. 𝗦𝗺𝗮𝗹𝗹 𝗶𝘀𝘀𝘂𝗲𝘀 𝗰𝗮𝗻 𝘁𝗿𝗶𝗴𝗴𝗲𝗿 𝗯𝗶𝗴 𝗰𝗼𝗻𝘀𝗲𝗾𝘂𝗲𝗻𝗰𝗲𝘀 Flood coverage doesn’t just apply to units in FEMA zones, it applies to the entire property. A single pipe burst can cause $100K+ in damages, even on top floors. Older systems like Stab-Lok electrical panels can spike your premiums or make you uninsurable. Lenders typically require general liability insurance, but for larger deals or higher-risk properties, many also require umbrella coverage. Umbrella coverage acts as a second layer of protection and often cost 30–80% more than your base liability premium, depending on limits, property type, and perceived risk. ___ 𝟯. 𝗧𝗿𝗲𝗮𝘁 𝗶𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗮𝘀 𝗮 𝗽𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼-𝘄𝗶𝗱𝗲 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 If you own multiple properties with separate policies, engage your insurance broker to assess master policy options. Aligning them under a master policy based on vintage, size, and geography can secure better terms. But if you deviate too much: say, with a one-off property that doesn’t match your portfolio profile, your premiums across the board can go up. Insurance strategy should scale with your acquisitions. 𝗕𝗼𝘁𝘁𝗼𝗺 𝗹𝗶𝗻𝗲: Done right, insurance becomes a strategic lever: → Shields you from downside risk by shifting catastrophic risk off your balance sheet → Satisfies lender requirements → Supports scalable growth by reducing administrative complexity and allowing you to forecast insurance costs more accurately P.S. We’re planning to bring in more experts in the coming weeks. Would you like to connect over a call? send me a message, and let’s set it up.

🔥 Multifamily Insurance Costs Have Skyrocketed—Here’s How We’re Adapting 🔥 One of the biggest challenges for multifamily operators right now? Insurance costs are through the roof. We’ve seen premiums double or even triple in some markets. Here’s how we’re tackling it: ✅ Bulk Policy Negotiations – We’re working with insurance providers to secure portfolio-wide policies instead of property-by-property, creating cost efficiencies. ✅ Improving Risk Management – Lower claims = better rates. We’ve tightened up our safety measures, fire prevention, and property inspections. ✅ Reevaluating Deductibles – Higher deductibles can lower premiums, but only when cash reserves are strong enough to cover unexpected claims. ✅ Strategic Market Selection – Some markets have become too volatile for insurance pricing. We’re factoring this into our underwriting more than ever. This is an issue no one can ignore in today’s market. How are you handling rising insurance costs in your portfolio? Let’s share strategies. 👇