Risk Management
Insurance Solutions

This webpage is designed for those that have a desire to conduct some research
as they navigate or prepare to begin the Risk Management level of planning.

Quick Links

This webpage was created for the convenience of our clients as well as prospective new clients. It is meant to be an educational tool that individuals can use to enhance their understanding of the components that comprise the Risk Management level of planning. Throughout this webpage, we have provided some insightful information, a series of resources, and numerous useful links that many of our clients have found to be particularly helpful as they have navigated this process. We think you will find it helpful as well.

Beginning The Process

It always begins with a vision and a desired lifestyle. It must absolutely begin this way, because without a vision, the Financial Advisor can't help you get there.

Sometimes identifying the various components that comprise one's vision and desired lifestyle can be challenging. Some individuals know precisely what they want, some have a general idea, and sometimes individuals really haven't given it much thought at all.

Now, consider for a moment if a Financial Advisor were to say to a client, "Tell me about your vision for the future, and tell me about your desired lifestyle." This is actually a very good question; however, it is not necessarily an easy question for any client to answer because it is such an open-ended question.

Consequently, navigating the process of identifying the various components that comprise one's vision can take time, and if takes time, that's alright. There is nothing wrong with that. And of course, sometimes the various components that comprise one's vision can change and evolve along with everything else that is taking place in one's life.
Change is always a constant.

Therefore, as you begin this process, if you find that you are struggling to identify the various components that comprise your vision and desired lifestyle, we are here to help. For your convenience, we have created The Carrillo Lifestyle Page. It is an excellent resource that may help you narrow things down as you think your way through the process.

With that being said, once individuals are able to identify the various components that comprise
their vision and desired lifestyle, they are then able to recognize the need to formulate a plan.

Developing a clear understanding of a client's vision and desired lifestyle is what allows us to identify specific financial goals and objectives. And of course, the client's financial goals and objectives are what we use to formulate the client's financial plan and subsequently identify appropriate solutions and strategies to incorporate in that plan.

For further details regarding our financial planning process, refer to Our Financial Planning Process Page.

Ultimately, the client's vision and desired lifestyle for themselves and their loved ones are what give the client a reason to protect the assets that they have worked very hard to accumulate. After all, it is the client's accumulated assets that will allow them to transform their vision into their reality.

Understanding The Need

Life Happens | A Nonprofit Organization

Alliance for Lifetime Income | A Nonprofit Organization

Actuaries Longevity Illustrator

American Academy of Actuaries | Society of Actuaries

 Council For Disability Awareness | A Nonprofit Organization

Important Anti-Procrastination Considerations

General Insurance Pricing Guidelines

Life Insurance Policies, Disability Income Insurance Policies, and Long Term Care Insurance Policies, are priced based on a number of different variables. And of course, not every insurance company prices their policies in the same way.

However, with that being said, three of the most important variables are:

1. One’s Gender
2. One’s Health
3. One’s Age

When it comes to one's gender, that simply is what it is. And when it comes to one's health, that can sometimes be the wildcard. For example, one day you are perfectly healthy and the next day you could be diagnosed with an illness that you didn't even know you had. However, one’s age is always the one predicable variable.

As a result of these circumstances, it is very important to always be proactive when it comes to the various components that comprise the Risk Management level of planning because it is always better to obtain the coverage that you need when you are still healthy enough to make it through the underwriting process and it is always more advantageous to lock in lower rates when your health and your age make it possible to do so.

The longer you wait, the more expensive it will be.
Obtain the coverage you need and lock in lower rates when you still can.
If something is important to you, you make time for it.

Insurance Age vs. Actual Age

Did you know that sometimes your Insurance Age can be different than your Actual Age?

This is because many insurance companies have a specific way of determining the age of an individual. The term “Age Nearest Birthday” is used to describe the methodology that is often used to determine one’s Insurance Age.

Essentially how it works is from one’s birthday until six months after one’s birthday, the individual is deemed to be that age for insurance purposes. Furthermore, some insurance companies will actually specify a certain number of days following one’s birthday as the cutoff point before the individual experiences a step up to next age. (E.g. 180 days) Ultimately, once individuals are closer to their next birthday than they are to their last one, that is when there could potentially be a discrepancy between their Actual Age and their Insurance Age. Consequently, when it comes to insurance, one’s half birthday is more important than his or her actual birthday.

It should also be noted that the date that an insurance company's underwriting department makes its final determination about one's coverage is much more important than the date that an individual's insurance application is actually submitted to the underwriting department for review and evaluation. When navigating the underwriting process, this is something very important to be aware of.

Our Philosophy on Time

The Significance of Taking Action

Link: Our Philosophy On Time

Relevant Variables of The Decision Making Process

When individuals, couples, families, and business owners navigate the Risk Management level of planning, it becomes
very important to identify all of the variables that should be considered as a part of the decision making process.

Identifying The Threats

It is important for individuals to identify, understand, and assess all of the threats that can potentially derail their financial plan and jeopardize their ability to retire when they want and how they want. At C.M. Carrillo Financial Advising, we help our clients protect themselves, their families, and/or their businesses from four unique threats.

1.) Premature Death - Not being able to complete all of your financial goals and objectives

2.) Longevity Risk - The possibility of outliving your money

3.) No Income Due To Disability - Not being able to earn an income due to illness or injury

4.) No longer being able to care for yourself, your spouse, an aging parent, or a loved one

Prioritizing The Solutions

After each of these threats has been identified, understood, and assessed, individuals must then prioritize the solutions that can be utilized in order to effectively protect them, their family, and/or their business from these particular threats. It should be noted that there are solutions available in the marketplace today that are capable of helping individuals mitigate the risks associated with multiple threats. In other words, strategic planning can make it possible to kill two birds with one stone. Question: Which threats most concern you?

Insurance Company Due Diligence:
4 Important Questions To Ask

Once it has been determined that there is in fact a need to effectively manage a particular risk, it then becomes very important to select the company to utilize in order to obtain the necessary insurance coverage. Deciding to do business with a particular insurance company can have significant long-term ramifications. Therefore, some key questions should be asked about any insurance company with which one may potentially do business.

Question 1: Is the Insurance Company a Mutual Company?

Within the world of insurance companies, there are two types of companies: Stock Companies and Mutual Companies. The difference between the two is really very simple. It is merely a question of who owns the company. In the case of stock companies, the stockholders own the company. In the case of mutual companies, policyholders own the company. This particular dynamic has a number of significant ramifications.

First, when an insurance company is profitable, the profits accrue to the owners. For stock companies, that means profits go to the stockholders. For mutual companies, that means profits go to the policyholders. Now in the case of mutual companies, this is a really big deal because essentially what it means is that mutual companies operate for the benefit of their policyholders, who are both clients and owners of the company.

Furthermore, this is particularly significant because it can also have a profound impact on how an insurance company's top level management team makes decisions. To illustrate this point, take a moment and consider how many parties the CEO of an insurance company must satisfy when making decisions.

Sometimes certain decisions may satisfy or benefit one party while adversely impacting one or multiple other parties. That being the case, the Business Model of mutual companies inherently removes any potential conflict of interest between the company's owners and the company's clients because they are one and the same.

Furthermore, when it comes to stock companies, the top level management team may be inclined to make certain risky decisions with the company's assets in the period of time leading up to the announcement of the company's quarterly earnings report. This may happen because the firm's top level management team has a desire to positively influence the share price of the company's stock. Certain decisions may yield positive short-term results for the company's stock price; however, they may also potentially lead to some negative long-term ramifications for the company from a risk perspective. On the other hand, the top level management team of mutual companies do not have to concern themselves with short-term or long-term fluctuations in the company's stock price because the stock doesn't exist.

The financial crisis of 2008 is an excellent example of why working with a mutual company is particularly advantageous. During that tumultuous period in time, the clients of mutual insurance companies didn't have some of the worries that were common among the clients of stock insurance companies. Of course, this is all within the context of insurance. The investment side of things was a completely different story.

Question 2: Does the Insurance Company Issue Participating Policies?

Mutual Companies operate for the benefit of their policyholders; however, it should be noted that not all insurance policies issued by mutual companies are participating policies. The term "Participating Policy" refers to an insurance policy that is eligible to receive dividends from the company in years that a dividend is paid.

As long as the insurance company in question offers participating policies, the policyholders of participating policies will be able to receive the portion of the company's profits that they are entitled to. This comes in the form of dividends, which are paid when the company's Board of Directors votes to declare a dividend for any given year. It should be noted that dividends are never guaranteed.

Question 3: Does the Company Innovate?

The Significance of Innovation

Question 4: How Strong is the Company?

In recent years, there have been reports of certain insurance companies not being able to meet all of their obligations to their policyholders. This sort of problem has become especially evident to many seniors who purchased long term care insurance policies from insurance carriers that successfully managed to overextend themselves. That is why when evaluating a particular insurance company, it is always prudent to research the company's financial situation. As it so happens, one significant data point that can really help shed some light on an insurance company's financial health is its Comdex Ranking, which is otherwise known as a Comdex Score.

A Comdex Ranking is a composite score averaging the ratings of the major insurance rating agencies, which include: A.M. Best, Fitch, Moody’s, and S&P. A company's Comdex Score is not actually a Rating. Instead, it is a Ranking, which is based on the average of all of the different ratings that the various ratings agencies give to a particular insurance company. The Comdex Scoring system is based on a number scale of 1 to 100. The higher a company's score, the better its ranking. For example, if an insurance company’s Comdex Score is 80, that means it ranks higher than 80% of all other insurance companies with multiple ratings. An insurance company must have ratings from at least two insurance rating agencies to have a Comdex Ranking. In 2023, MassMutual's Comdex Ranking is 98.

The Significance and Symbolism of The Palm Tree

Link: About The Palm Tree

Throughout this webpage, we have provided a number of resources to make clear why C.M. Carrillo Financial Advising has such a strong relationship with Massachusetts Mutual Life Insurance Company (MassMutual). We certainly are very proud of that relationship and we wholeheartedly believe in the business model of our firm.

With that being said, it should also be noted that C.M. Carrillo Financial Advising is an independent financial advisory firm; therefore, we are not held captive in any way. Consequently, we do have the ability to access a wide array of different insurance carriers within the marketplace, which in turn allows us to offer all of our clients an enhanced level of flexibility.

When beginning the Risk Management level of planning, it is very important to remember that the conversation should never begin with a particular product. Instead, the conversation should always begin with your vision for the future as well as your desired lifestyle. This is because that is what you are ultimately protecting. Should the unexpected happen, when it comes to the Risk Management components of your overall financial plan plan, it's all about completing your financial goals and objectives that have not yet been realized. The Risk Management level of planning establishes the foundation of your overall financial plan. That is what makes this level of planning so vital.

Massachusetts Mutual Life Insurance Company

Established: 05/15/1851

* Special Note: C.M. Carrillo Financial Advising is not affiliated with MassMutual in any way on the investment side of the financial planning process.

MassMutual Income Protection Solutions

Have you ever considered implementing a Paycheck Protection Program for yourself, your family, and/or your business? If not, you may want to. The reason is because everyone's financial plan, no matter how simple or sophisticated, is contingent on the individual actually having an income. As soon as an individual's income ceases to exist, the most comprehensive financial plan will crack and crumble and collapse like a house of cards. That is why many individuals decide to insure that which they can least afford to lose - their income.

What is your most valuable asset?

Understanding The Risk: Quick Facts

Special Considerations: A Deeper Dive

MassMutual's Income Protection Solution For Individuals

MassMutual's individual Disability Income Insurance Policy is called Radius Choice.

MassMutual's RetireGuard

MassMutual's RetireGuard is a very powerful solution for proactive individuals that have a desire to ensure that they always remain on track when it comes to their retirement goals. This innovative solution makes it possible for disabled individuals to replace an amount equal to the contributions that would have been made to their retirement plan had they not become disabled. MassMutual's RetireGuard is available as both a Rider, which may be attached to a Radius Choice Disability Income Insurance Policy, as well as a stand-alone solution.

MassMutual's Business Overhead Expense (BOE) Solution

Many business owners play such an integral role in the daily operations of their business that if they were not able to fulfill their duties, it could potentially jeopardize their company’s ability to function properly and ultimately remain in business. MassMutual’s Business Overhead Expense Insurance is designed to help ensure that the temporary absence of a business owner due to illness or injury will not automatically result in an unrecoverable disruption to the business.

MassMutual Disability Income Insurance Policies can be customized with certain Riders in order
to meet your specific needs. If you would like to further explore how a MassMutual Disability
Income Insurance Policy can protect you, your family, and/or your business, Call Today! (314)-724-0116

Long Term Care Planning

For information about Long Term Care Planning, use this link to view our Long Term Care Planning Page.

MassMutual Life Insurance Solutions

Life Insurance can help you find financial peace. It can provide them financial security.
It is your responsibility and there are numerous highly versatile solutions available in the marketplace today.

MassMutual Life Insurance Policies can be customized with certain Riders in order
to meet your specific needs. If you would like to further explore how a MassMutual Life
Insurance Policy can protect you, your family, and/or your business, Call Today! (314)-724-0116

MassMutual Insurance Dividends For Participating Policyholders

Dividends are never guaranteed; however, MassMutual was founded in 1851 and the company has paid dividends every year since 1869.

MassMutual's Financial Technology Innovations

The MassMutual App

MassMutual's Coverpath Coverpath is a new innovative platform that makes it possible to apply directly online for a MassMutual Life Insurance Policy. Coverpath gives you the flexibility to obtain life insurance quotes and compare different coverage options for certain products offered by the company. It also allows the process to work around your schedule. Coverpath Application Process User Guide Link: MassMutual Coverpath | Christopher M. Carrillo To learn about gifting life insurance to a child you love, use this link to view The Gift Of A Lifetime Program Page.