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Critical Illness Insurance: Preparing To Bridge The Gap

Many Americans are living without ample savings – and a lot are living paycheck to paycheck. When these families are struck with an unexpected illness such as a heart attack, stroke, or cancer, it can cause a serious financial hardship… even if they have health insurance.
 
The average annual income in the United States is $50,000 – and most health insurance policies carry at least a $5,000 or $10,000 out of pocket max that will easily be reached when suffering from a critical illness.
 
On top of that, any one of these illnesses will undoubtedly result in an absence from work for an extended period of time – causing the loss of valuable income at a time when they are experiencing increased expenses.
 
Consider This
 
This combination of out-of-pocket healthcare costs, loss of income, and mounting household expenses come together to form ‘The Perfect Storm’, which too often leads to a bankruptcy.
 
Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year-making health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card bills or unpaid mortgages, according to new data.

Having health insurance doesn’t buffer consumers against financial hardship.

Most advisors sell life insurance to protect their clients should the bread winner not make it home from work one day. But how can we protect our clients against financial catastrophe if the heart attack, stroke, or serious illness doesn’t amount in a premature death?
 
Critical Illness Insurance pays a tax free lump sum payment on diagnosis of any one of a list of serious illnesses – including cancer, heart attacks, or stroke.
 
Claims statistics suggest we are five times more likely to suffer from one of these issues, than we are to die before we reach age 65. You don’t want to get a call one day, find out something has happened to a client, and regret having never discussed the opportunity to purchase a Disability Income or Critical Illness Plan with them – have the discussion with each of your clients as soon as possible.
 
Our dedicated DI Sales Reps are well versed on the features and benefits of Critical Illness Coverage – contact us at (949) 863-0700 Option 4 for assistance today.
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Income Protection Could Never Be More Affordable Than Right Now!

When is the best time to buy an income protection plan? Could it be when my client is at the top of their earning years? Or when they are just starting their career?
 
The answer is, right now, before any health concerns arise that would preclude them from securing this valuable coverage. Before the premium is too expenses due to older ages.
 
Young couples (ages 30 to 50) are very important prospects for income protection. Start the conversation about income protection with young couples who have bought a home or are starting a family. This is the best time to build a foundation of financial protection.
 
Individuals in this age group still have a lifetime of earning potential. Income is their most important asset. Their lifestyle and long-term financial plans depend on the ability to work and earn a living.
 
Example: A 33 year old client earning $60,000 annually will earn $3,463,811 by age 67 with a 3% annual increases. Many would agree that this is an asset worth protecting.

An illness or injury that keeps your client from working can quickly impact other assets such as savings and retirement funds.

These resources could be depleted depending on the time needed for recovery and return to work. It could take years to rebuild these assets.
 
Who to Prospect:
  • Single, fulltime wage earners
  • New home owners or just started a family
  • Primary wage earners in families
  • Your current Life Insurance Clients
  • Auto policy owners with higher limits
Solution:
  • Talk to your clients about the value of their ability to earn an income. Explain what’s at risk. Potentially a lifetime of earning should they lost that ability due to illness or injury. (whatsmyeiq.org)
  • Show how disability income insurance can pay them an income while they recover to help pay expenses and protect their other assets.
  • Let your clients know that there is never a better time than now to purchase this coverage. The premium will never be lower and typically their health will never be better while they are still young.
We have a unique quoting tool (https://cpsinsurance.assurity.com/) and client approved marketing tools to help you prospect your current clients and reach new potential clients. Contact your Disability experts to learn more about growing this part of your business.
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Are You Including Disability Coverage In Your Client’s Buy-Sell Planning?

When most producers and their clients think about Buy-Sell Planning for their business, they consider Life Insurance as the only vehicle needed in order to provide a source of funding for the buy-out of an owner.
 
It’s true that Life Insurance will provide for sufficient funding of a business continuation plan if the insured owner dies while the policy is in-force, but what happens if the partner doesn’t pass away and instead, they become injured or sick to the point where they are no longer capable of working in their normal capacity?
 
If you have used Disability Buy-Sell Insurance coverage as a companion to Life Insurance planning then your clients will be prepared for exactly this situation.
 
Including a Disability Income Policy in a Buy-Sell Arrangement Can Serve Two Main Purposes
 
It provides a source of funds to their business for the purchase of a disabled owner’s interest in a business while also providing compensation to a disabled owner for his or her equity in the business.
 
We can provide you with fact finders, valuation questionnaires and approach letters to help you to either review an existing Buy-Sell arrangement or to help you plan for the implementation of a new business continuation plan.
 
Once you have discussed and assessed the company’s need for including DI inside of their Buy-Sell arrangement, you can use it as a spring board to then promote Key Person Disability coverage, as well as personal DI coverage for any employees.
 
Success Story
 
Recently, we were contacted by a producer looking to secure a basic Term Life policy on a business owner. In discussing the need for the coverage, we brought up the concept of including Disability Income inside of the Business Continuation Plan.
 
The result was an individual DI policy for the owner and we are now working on providing plans for all of the Key Executives. Prior to this case, the producer had never sold a DI policy with us.
 
Getting Started
 
If you have written Buy-Sell Insurance Policies in the past but did not include any Disability Income Protection, it is never too late to reach out to your clients and offer them a complimentary policy review to ensure that the planning is still sufficient for their business.
 
While reviewing the Life Insurance inside of the plan, you can discuss the need to have DI policies including in the Continuation Planning.
 
Helping to protect your client’s business interests in the event of an untimely injury, sickness or death will further solidify your role as their primary insurance professional and will likely lead to additional sales opportunities within the business and referrals for new client opportunities elsewhere.
 
Call us today for help in starting the review process or for ways to enter the business insurance marketplace.
news_4.27.22

Introducing A One-Way Disability Buy-Out Policy For Business Owners

The average business owner is not prepared to have a spouse or relative step into the business in the event that they were unable to work. In most cases, any business owner would prefer passing responsibilities to someone who already understands the business and will know how to keep it profitable.
 
Issue a disability buy-sell option for your sole-owner business clients called a One-Way Buy-Out.

Offers the flexibility to allow a key employee of the business to purchase Disability Buy-Out (DBO) insurance to fund a buy-sell agreement between him/her-self and the owner of the business.

The process is very similar to that of a life insurance policy that funds a buy-sell agreement. The difference is, your business owner clients have an eight times greater likelihood of becoming disabled during their working years than passing away.
 
Advantages of One-Way Disability Buy-Out Insurance:
  • The disabled business owner is protected by obligating the Key Employee purchaser to buy-out the owner’s interest
  • The Key Employee purchaser is protected by providing the opportunity and funding to purchase the disabled owner’s interest
  • Prevents the sole-owner from having to find an individual to buy the business while he/she is totally disabled
  • Provides a smooth transition of ownership
  • Benefits are tax-free (premiums are not deductible)
Contact your Disability Insurance Specialist for more information on how to properly develop a Disability Buy-Sell Agreement between the business owner and key employee.
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The Future Envisioned: Making It Happen

Do your clients have clear visions of their future?
 
While many may have a vague sense of what they want, things to accomplish, or relationships they hope to develop, very few can actually articulate what they think their life will look like five or more years down the road.
 
As an advisor, it’s important to not only help your clients plan for the future they desire, but to also help protect it. And the best place to start is by protecting their income.

Income, when viewed over an entire career, is likely to be your clients’ single biggest asset. It is the source of funding today, tomorrow, and every day thereafter.

Income will pay for a lifetime of purchases, both large and small; it will fund the monthly cost of a mortgage, make up a portion of savings, and eventually support a comfortable retirement.
 
What if your client were to become disabled?
 
A 35-year old with an annual salary of $50,000 with 3% raise each year who experiences a permanent disability may lose up to $2,625,138 in potential earnings by age 67. Without a plan in place to protect that potential, your client is exposed to an enormous amount of risk. (http://www.whatsmyeiq.org)
 
How can you get the conversation started?
 
Start by asking your clients what would happen if they got sick or hurt and suddenly didn’t have the ability to earn their income.
 
  • How long could they last before their lifestyle would be disrupted?
  • If they have a family, how would they be affected?
  • Would they need to dip into personal savings or other assets to cover expenses?
  • What would be sacrificed to keep their life intact while they recover?
Your clients’ incomes fuel the engines that drives them into the future.
 
Without it, their ability to fund the futures they envision and that you helped to plan is in jeopardy. Now is the time to talk to your clients about income protection – there are affordable plans available to protect a most valuable asset.
 
Contact your DI Sales Specialist to discuss the income protection opportunity and the availability of plans to meet your clients’ needs.
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4 Ways Clients Can Cash Out On Their Life Insurance

Your clients need guaranteed life insurance protection today – but life changes, and so can your clients’ life insurance needs.

A unique feature on guaranteed universal life is a return of premium option, included at no additional charge within the policy, which provides clients with an exit strategy, giving them flexibility for their future.

How does this rider work?
 
Clients purchase a Guaranteed Universal Life (GUL) policy and make the required premium payments – the required premium is the amount that guarantees the death benefit through age 100. On the 15th, 20th and 25th policy anniversary, clients have a 60-day window where they have the opportunity to surrender their policy and get their premiums returned to them. If they don’t exercise the rider, there will be no impact on the policy.
 
4 Cash Benefits For Your Life Insurance Clients
 
  1. For Retirement. A 45-year-old insured receives 20 years of death benefit protection and at age 65 receives her paid premiums back and uses the cash to supplement retirement income.
  2. For College Costs. The insured bought two permanent policies and currently has young children. One of the policies was a GUL policy with the refund option available. When the children are at the age to attend college, the death benefit needs of the family change. He can surrender his GUL policy in year 15, 20 or 25 and use the cash to help pay for the child’s college education.
  3. For Business Planning. The insured owns her own business and has a key employee, Tom. She purchases a GUL policy to protect her business if Tom died unexpectedly. In year 18 of 20, Tom resigns – and two years later she will receive all of her premium payments back.
  4. To Pay-Up Another Policy. A 55 year old has a need for $5M in life insurance. He purchases two GUL policies, one for $2M and another for $3M. When he turns 75, he no longer needs as much coverage. He surrenders the $2M policy and uses the cash value to pay up the remaining policy. The insured still has $3M of insurance with no further premiums due.
Contact your Life Sales Rep for more on how the return of premium option can positively impact your clients and your business.
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New Markets To Grow Your DI Sales

The need for an income protection plan is not just for the Executive, Doctor or Attorney earning in excess of $150,000. According to the United States Census Bureau, in October 2020 the Median Household annual income in the United States was $67,521 from all occupations.
 
Average everyday working people (Middle America) are just as dependent on their income to provide for themselves and their families as anyone in those higher tax brackets.
 
Your opportunities are endless – reach out to your clients, friends, or family.
 
Ask if they have an income protection plan in place should they get sick or hurt. You can offer them an affordable plan to protect them and their family. Of the advisors I speak with every day, Life Insurance Agents, Health Insurance Agents, and P&C Brokers, 92% are not talking to their clients about income protection and how affordable it can be.
 
You can differentiate yourself as an advisor just by offering valuable coverage to your clients that no one has ever spoke to them about.
 
Here’s an example:
 
Did you know that the premium for a 40 year old Male Office Administrator for $3,400 monthly benefit is only $41.63 per month? There are affordable plans for even part time Dental Hygienist and Registered Nurses working as little as 24 hours per week.
 
Talk about opportunities, there are over 192,800 Dental Hygienist in the US earning an average annual income of $97,250* and 2.7 million Registered Nurses earning approx the same income.
 
Never let premium be the reason your client’s income is left unprotected from an injury or sickness.
 
The new affordable DI plans can fit most any budget. The premium for a 35 year old Female Dental Hygienist for $2,500 monthly benefit is only $55.52 per month. A 40 year old Male Insurance Agent can purchase $4,000 monthly benefit for $60.28 per month.
 
Your clients want to buy Income Protection, but they need someone they know and can trust to ask them about it. You are at the front-line to educate your Middle America clientele about the vital need for income protection in the event of an injury or sickness and how affordable it can be.
 
Discuss income protection insurance with all your prospects and clients, because they may not understand the risk of losing their income should an injury or an illness strike.
 
Contact your Disability Experts for Marketing Tools and Sales Ideas to help your clients.
 
*according to the Bureau of Labor Statistics
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Why Disability Income?

As discretionary income tightens in most households across the country, many Americans have put the purchase of retirement and insurance vehicles on the back burner, leaving themselves open to risk of severe loss and no way to indemnify.

While most would consider their greatest asset to be a house or a car, in reality a human’s most valuable asset is their ability to earn an income.

Without cash inflow, no insurance, investment, or savings product can be purchased and utilized. Disability Income is a commonly overlooked portion of the planning process yet can be the most important piece of the puzzle.
 
Common misconceptions about disabilities.
 
The main reason Disability Income is usually overlooked by Financial Professionals and their clients is the misconception of what causes a disability.
 
A recent consumer study released by the not-for-profit Council for Disability Awareness (CDA) reported that 71% of respondents said a disability is most likely caused by a serious accident.
 
In reality, insurance statistics show that only 9% of long-term disability claims result from serious accidents. The remaining 91% of income-interrupting disabilities come from common ailments like back and joint pain, chronic diseases, cancers, depression and pregnancy.
 
If your client becomes ill with any of the conditions or disabilities listed above and are unable to work for a period of time, will they have sufficient funds available to continue paying for their numerous financial obligations?
 
We can help.
 
We understand the challenges your clients may be faced with during periods of disability.
 
Our strong relationships with top Disability Providers allow us to help you find the best fit for your client regardless of their occupation.
 
Products range from simplified issue to fully underwritten with the goal of getting your client coverage as quickly as possible. Nearly all respondents in the CDA study rated their ability to earn an income as more valuable than any other resource in maintaining financial security. However, only 37% said they have thought about taking steps to protect their income. Don’t let your client fall into the remaining 63%, the need is real.
 
Contact your dedicated Disability Sales Specialist to learn more about how we can help your clients protect their most valuable asset.
news_5.18.22

Protecting Your Client’s Income And Their Ultimate Retirement Goals

With the economy the way it is, most would agree that saving for retirement in these trying economic times can be challenging to say the least.
 
According to a CNBC study, 36% of American’s making over $100,000 a year, said they aren’t contributing a dime to retirement savings such as a 401k or IRA account.

Now imagine trying to save for retirement if you are too sick or hurt to go to work and earn an income. It quickly becomes next to impossible.

We have a carrier that offers a solution to help protect your client’s ultimate retirement goal – called DI Retirement Security.
 
DI Retirement Security allows your client to continue saving for retirement even if a disabling event should unexpectedly arise, by making a retirement contribution of up to 15% of their income or a maximum of $4,550 every month for the length of any long-term or total disability event.
 
Here are some sales approach tips:
  • Sell Individual DI Insurance and DI Retirement Security together
  • Approach clients who are at their maximum issue limits for Individual DI
  • Approach clients who are contributing the maximum to their 401(k)
  • Talk with business owners about providing DI Retirement Security as an employee benefit for executives and key employees
To find out more about how you can couple Individual DI Insurance with DI Retirement Security to help your client reach their ultimate goal of retirement, please contact your dedicated DI Associate at (949) 863-0700 Option 4 today.
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The Advantages Of A Full Product Portfolio

As you know, no two clients are the same. They have unique financial situations, diverse needs and different occupations.

Luckily, one of our strategic carriers offers a comprehensive DI portfolio that offers a fit for every one of your client’s individual needs.

This product portfolio includes Accident Only, Short-Term Disability (accident/sickness), Long-Term Disability (accident/sickness) and Business Operating Expense.
 
In addition, there are numerous optional riders you can add to tailor an income protection plan to meet the needs of your clients.
 
Additional riders include:
  • Critical Illness Benefit
  • Hospital Confinement Benefit
  • Return of Premium Rider
  • Extended Own Occupation
  • Future Insurability Option
  • Extended Proportionate Disability Benefits
For more information about developing a plan tailored to your client’s needs, contact your Disability Income Insurance Specialist today.
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